Hindustan Unilever Q4 net profit up 11 pct at Rs 872 crore, beats forecast

Written by Agencies | Mumbai | Updated: Apr 29 2014, 02:20am hrs
Hindustan UnileverSales of Hindustan Unilever personal products increased by 8.31 per cent to Rs 1,983.29 crore in Q4. (Reuters)
FMCG major Hindustan Unilever (HUL) today reported 10.78 per cent jump in standalone net profit at Rs 872.13 crore for the fourth quarter ended March 31, 2013-14 fiscal.

The company had posted a profit of Rs 787.20 crore in the January-March quarter of 2012-13.

HUL's net sales climbed to Rs 6,935.82 crore in Q4, 2013-14, compared with Rs 6,367.14 crore a year earlier, up 8.93 per cent, the company said in a BSE filing.

Overall expenses in Q4 stood at Rs 6,082.32 crore as against Rs 5,555.46 crore in the year-ago period.

During the quarter, revenue from soap and detergents increased by 9.57 per cent to Rs 3,497.12 crore, personal products increased by 8.31 per cent to Rs 1,983.29 crore.

Revenue from beverages grew by 7.54 per cent to Rs 869.04 crore and packaged food increased by 12.71 per cent to Rs 419.68 crore.

The company's Board of Directors has declared final dividend of Rs 7.50 per equity share of face value of Re 1 each for the fiscal year ending March 2014.

HUL scrip was trading at Rs 579.30, down 0.24 per cent, on the BSE.

Ritwik Rai, FMCG analyst, Kotak Securities: HULs 4QFY14 revenues have come in broadly in line with our expectations, with 3% volume growth. EBITDA has come in 4% ahead of our expectations, on the back of : a/ lower than expected input expenses, and b/ lower than expected advertising and promotions (A&P) expenses (barely 2% y/y growth). Profits in the beverage segment surprised us positively (20% y/y growth), while personal products profit growth was weak (5% y/y), even on a fairly low base. Overall, we see these as mixed results .While the profits are ahead of expectations, 1/ the outperformance has been enabled by weaker investments in brands (low A&P growth), 2/ weakness in personal products profit growth is an area of concern (the segment accounts for about 45% of the companys profits).

Hindustan Unilever sees demand staying subdued

(Reuters) Sales growth at Hindustan Unilever stayed muted for the eighth straight quarter, hurt by a sluggish economy, and India's largest consumer goods maker said it did not expect a demand recovery in the near-term.

The company's results came after parent Anglo-Dutch consumer group Unilever Plc , which generates more than half of its revenue in developing markets, said emerging markets sales rose 6.6 percent, slower than the 8.4 percent growth in the fourth quarter.

"The pace of growth in the market is slow and there is a high level of inflation hurting consumer wallets," R. Sridhar, chief financial officer said on a conference call.

"It will be difficult to say when will there be an improvement in consumer sentiment but we are hoping it is going to be sooner rather than later," he said.

A normal monsoon, key to rural demand, and pre-election spending on consumer goods to woo voters in Asia's third-largest economy, failed to lift consumer spending as surging commodity prices and meagre salary increases weighed on incomes.

"The performance is deteriorating every quarter and it is causing more worry than it typically should because it's two years in a row with no recovery in sight, said G. Chokkalingam, founder of research and fund advisory company Equinomics.

Hindustan Unilever (HUL), which manufactures Fair & Lovely fairness cream and Sunsilk shampoo, said net profit for the quarter grew 11 percent to 8.7 billion rupees ($143.4 million). Net sales rose 8.9 percent year-on-year to 69.4 billion rupees.

Analysts on an average estimated a net profit of 8.5 billion rupees on sales of 70 billion rupees, according to Thomson Reuters Starmine Estimates.

Overall sales volumes in the March quarter grew 3 percent, below market estimates of 5 percent growth and lower than the 6 percent growth logged a year ago.

The personal care segment, which grew 8 percent, saw demand for skin, oral and hair care products slow further after growing 12 percent in the previous quarter and 12.7 percent in the same period a year earlier.

The company trades at 32.2 times its 12-month forward earnings, compared with 27.7 times for ITC Ltd and 29.7 times for Godrej Consumer, according to Thomson Reuters Starmine Smart Estimate.

Out of the 41 analysts covering the stock, 19 had a 'sell' rating along with six 'strong sell', while 13 had 'hold' recommendations along with two 'buy' and one 'strong buy'.

Shares of the company have risen 1.8 percent so far this year, compared with a 4 percent increase in the consumer sector index of the Mumbai stock exchange.

($1=60.6550 Indian rupees)